(Adds analyst comment, detail)
OSLO, July 14 (Reuters) - Norwegian oil firm Det norske is to cut capital spending this year due to projectcost savings after reporting a smaller than expected 22 percentfall in second-quarter core profit.
The company said on Thursday it expected capital spending of$900-920 million this year down from a previous estimate of$925-975 million. But Det norske also said exploration spendingthis year would rise to $200-220 million from a previous rangeof $160-170 million due to more wells being drilled.
"It looks like the company's effort to collaborate withother industries and its continuous cost focus are paying off,"Swedbank analyst Teodor Sveen-Nilsen said in a note.
In June, Det norske agreed a $1.3 billion deal with BP to merge their Norwegian businesses. Det norske said themerger was progressing according to plan and it was due to closeby the third-quarter.
The deal aims to cut costs, challenge Statoil's dominance of the local industry and also seek furtheracquisitions, the two firms have previously said.
Det norske's second-quarter core earnings (EBITDA) fell to$174 million compared to $224 million last year, beatingforecasts in a Reuters poll of $154 million.
"The main reasons for the better than expected figures weretwo-percent higher production ... (and) low explorationexpenses," Sveen-Nilsen said. (Reporting by Stine Jacobsen, writing by Stine Jacobsen andGwladys Fouche. Editing by Jane Merriman)